Using Psychology Marketing in Business

One of the greatest tools a marketer can use is understanding how and why people act the way they do. Knowing how to create content your audience will love and trust and that is personalized to target the right people is key.

Understanding key principles in psychology can take your marketing efforts from good to great, all because you’re starting to target the right people in the right places, the right way.

Marketing psychology (or psychological marketing) is a method of using psychological techniques in your marketing efforts. Such an approach takes into account the irrational, unconscious decisions customers make to create a more nuanced and effective online campaign. It’s about finding patterns to make generalized assumptions, but it’s also about personalizing customer experiences.

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Why is Marketing Psychology Important?

Marketing psychology can be hugely effective in helping you drive more sales and see better results from your marketing campaigns. Whether your customers realize it or not, there’s a lot of psychology that goes on when they’re making a purchasing decision.

If you know what’s happening behind the scenes, you’ll be able to craft marketing tactics and campaigns that work to your advantage in helping consumers make a purchase. And in the long-term, your business will see more sales and better results. Many marketers (and even non-marketers) already use marketing psychology to some extent. In fact, influencers use psychological techniques all the time. Big brands and small businesses alike benefit from psychological marketing tactics by predicting consumer behavior and even influencing it to an extent. In other words, psychological marketing is smarter and more efficient than traditional marketing.

Marketing Psychology Examples

Here are some to give you a better idea of how marketing psychology works:

1. Airbnb (Press the Emotion Buttons)

Airbnb is a hospitality business. When the brand entered the New York market, it suffered a solid resistance from the hotel business. To put the word out to the general public, it ran an ad campaign with the slogan: “New Yorkers agree: Airbnb is great for New York City”. To make the impact even stronger, the brand created a video of Carol Williams who was one of its hosts.

2. Asos ( Press the Price Sensitivity)

Understanding how your consumers react to different price levels shows your awareness of your price point, consumer demand, and your operating marketplace.?You should?track competitive product prices and analyze which target consumer bases react better to offers or discounts.?Because, contrary to popular belief, discounts don’t?always?drive purchase behavior.

3. Tommy Hilfiger (Sense of Scarcity)

Tommy Hilfiger creates a sense of Scarcity and exclusivity by clearly stating the status of certain products as “exclusive”. Moreover, the brand knows that its audience values exclusivity and quality in its products.

4. Dr. Martens (Press on Social PROOF)

Dr. Martens uses Social Proof to encourage customers to make a purchase. In this case, using a “best seller” category can be seen as a form of social proof because it shows which products customers favor. Other types of social proof you can use include UGC, reviews and testimonials, influencer marketing, etc.

5. H & M (Join Hands with an Influencer)

Influencer marketing is the hottest trend in social media. According to Influencer Marketing Hub, businesses earn $6.50 dollars for every $1 dollar that is spent on influencer marketing, so why is influencer marketing so successful?

The answer is simple. Humans have a tendency to trust industry experts. We have an innate trait to trust the advice of authority in an industry. The common observation of this behavior can be seen in our daily life when we seek advice from our seniors to validate our decisions.

6. Toyota (REASON WHY)

Toyota’s reasons for purchasing are stressed with their “less fuel” characteristic.??

“To buy or not to buy?” - People will always weigh the reasons for purchasing a product before?checking out.?

Especially if it’s an expensive purchase, like a car.?Product descriptions highlighting the car’s benefits?are reasons why to buy it (i.e., this car has a sunroof), and show how your product has?differentiating qualities.

7. Body Shop (Press on Reciprocity)

The Body Shop?uses the Reciprocity Principle by giving out free samples. This technique can take on other forms, including free advice and trial periods.

8. Lush (Press on Scarcity)

Lush?uses Nudge Theory to create FOMO and utilize Scarcity. They add “limited edition” tags to signal to their audience that certain products on offer will soon be sold out because they aren’t as easily available as others. This encourages customers to purchase these particular limited products.

Keep in mind that the digital sphere is still evolving. New findings on buyer behavior and decision-making are published every year. Consequently, staying up to date with the latest discoveries in marketing psychology is essential to using it effectively. Apply the tips in this article to your own online campaigns and start reaping the results of the seeds you planted.

Marketing Psychology Best Practices

The best way to use marketing psychology effectively is by understanding the way it works. Here are some of the most popular ones to start from:

• Loss Aversion: This theory says that most people prefer to avoid losing something instead of acquiring it. Loss Aversion is related to FOMO and Scarcity and Urgency Theory.
• Scarcity and Urgency Theory: This theory suggests that people tend to place more value on things that are believed to be rare rather than easily accessible. Likewise, creating urgency along with scarcity could result in FOMO (or Fear of Missing Out) when customers are afraid to miss out on a good bargain.
• Social Proof: Using social proof can help you increase trust in your products by having other customers validate the value of these products. Social proof can be used in different forms on your website, on?social media, and elsewhere.
• Tribe and Enemy: Also known as the Social Identity Theory, it states that a person’s sense of self is defined by their group membership. By dividing people into tribes, you can increase loyalty to their own tribe and increase the “discrimination” of other tribes (aka the enemy). This is particularly important for brand loyalty.
• Reciprocity Principle:?This principle assumes that when a brand does something good for a customer, the customer will be more likely to return the favor and even increase cooperation.
• Selective Perception: This theory states that customers process information based on what is most relevant to their needs and interests. The most effective way to use Selective Perception is by first conducting extensive research, surveys, and A/B testing to fully understand your customer's lifestyles, needs, and interests.
• Option Reduction: This theory states that by reducing the options you offer to customers, you make it easier for them to make a choice which ultimately?leads to more sales and conversions.
• Anchoring: This theory states that people make decisions based on the first piece of information they receive. The initial price you set is the anchor while the displayed price (discounted, on sale, etc.) is what people will consider being a good bargain even if it isn’t in reality.
• Nudge Theory: This technique involves subtly encouraging people to make the “right choice” by slightly guiding their decision-making process and actions. Most of the time, these subtle details are unnoticeable to your customers, but they can also be made more obvious and direct.
• Information-Gap Theory: This theory states that when someone has a gap in knowledge of a particular topic they are interested in, they will take action to find out what they want to know.
• Pratfall Effect: This effect assumes that when figures of authority make mistakes and then either claim to be the underdog or use their flaws in some way, their attractiveness increases in the eyes of their audience.
• Price Sensitivity: This technique takes into account competitor prices and responses of different audience segments to different price levels to adjust your own prices. Just like with Selective Perception, Price Sensitivity requires extensive research before it can deliver the best results.
• Foot-in-the-Door Technique: This technique involves starting small to get to something bigger. For example, when you offer a free trial, customers who start from it will be more likely to eventually purchase your paid option.
• Color Psychology: Color plays an integral role in customer decision-making and is essential for effective branding. For instance, the Von Restorff Effect states that when something stands out, it will get more attention and will be better remembered. Thus, using colors to highlight certain elements on your website will make them more memorable. Likewise, using fancy names for colors makes these colors more attractive (e.g. “mocha” rather than “brown coffee”).